• GST administration mid-year performance report 2015–16

    Foreword

    On behalf of the Commissioner of Taxation, I am pleased to provide this mid-year report on the ATO’s administration of the GST. This report is a requirement under the GST Administration Performance Agreement and my first report since taking up the role of Deputy Commissioner Indirect Tax in November 2015.

    Our financial performance during the first six-months of 2015–16 exceeded expectations allowing us to deliver a high standard of service and implement positive changes for our clients.

    We collected $28.80 billion in net GST cash (excluding non-general interest charge penalties), 6.6% higher than the same time last year, and raised $1.65 billion in GST liabilities from fewer client engagement activities. We are on track to meet our year-end commitments.

    Our efforts to enhance our predictive modelling and data analytics intelligence have led to better identification of clients who are unlikely to self-finalise without our intervention. This approach reduces unnecessary contact and ensures we focus our activities on prompting those who need assistance to lodge.

    To further support our clients, we continued to expand our range of contemporary tools and services, making it easier for them to meet their GST obligations and manage any debts that arise.

    Over the past six months, we maintained our focus on payment strategies and debt prevention, as well as taking timely and strong action with those who refuse to work with us, or are potentially trading insolvent. Our payment strategies, including our redesigned debt letters and SMS campaign to prompt those with a history of late payment, continued to influence behaviours. Compared to the same time last year, GST collectable debt decreased by 10.8% (or $413.5 million) and on time payment of GST remained high at 89.0%.

    Pleasingly, we received 50% fewer GST litigation matters compared to the same time last year and current GST litigation matters are at the lowest level in several years.

    I look forward to driving the ATO’s management of GST administration during the year ahead, and working closely with representatives from the States and Territories and members of the GST Policy and Administration Subgroup.

    Tim Dyce

    Deputy Commissioner Indirect Tax

    Our Performance

    Schedule A: Performance outcomes (mid-year snapshot)

    Schedule A provides information on performance outcomes under the GST Administration Performance Agreement.

    Some Schedule A indicators have not been reported at mid-year because the underlying data and calculations do not lend themselves to assured mid-year reporting. These will be reported in full at year-end in the GST annual performance report.

    It should be noted that mid-year performance results do not predict full-year performance outcomes and caution should be exercised in extrapolating these outcomes.

    Table 1: Maintain compliance

    Key outcome

    Measure

    31 Dec 2014

    31 Dec 2015

    Revenue outcome

    GST revenue (cash)

     

     

    Total cash

    $27.0b

    $28.8b

    Customs cash (net)

    $1.7b

    $1.9b

    GST debt

    GST debt outstanding

     

     

    Total

    $5.3b

    $5.1b

    Collectable

    $3.8b

    $3.4b

    GST debt collection rate(1)

    7.28%

    6.10%

    Supplementary indicators

    GST debt non-pursuit

     

     

    Value $

    $605.2m(2)

    $397.4m

    Percentage

    11.83%

    7.95%

    Ageing of GST debt – number of cases

     

     

    <30 days

    28,473

    30,563

    <60 days

    85,179

    84,594

    <90 days

    12,702

    11,516

    >90 days

    196,251

    185,276

    Total

    322,605

    311,949

    Ageing of GST debt – value(3)

     

     

    <30 days

    $526.4m

    $447.3m

    <60 days

    $580.6m

    $558.2m

    <90 days

    $118.4m

    $136.4m

    >90 days

    $2,613.1m

    $2,283.2m

    Total

    $3,838.6m

    $3,425.1m

    Notes:(1) GST debt collection rate is defined as the ratio of GST collectable debt to GST revenue (cash) over the past twelve months.(2) GST debt non-pursuit refers to debt that is irrecoverable at law or uneconomical to pursue. The higher level of GST debt non-pursuit at 31 December 2014 was due to a specific focus on clearing insolvent debt.(3) In previous reports, there were slight variations between total GST collectable debt and total ‘Ageing of GST debt – value’ due to different methodologies. These methodologies have now been aligned and updated figures differ from those previously published.

     

    Table 2: Compliance outcomes

    Key outcome

    Measure

    31 Dec 2014

    31 Dec 2015

    Compliance outcomes

    Compliance liabilities raised

    $1.28b

    $1.65b

    Voluntary disclosure large market

     

     

    Number

    110

    79

    Value $

    124.1m

    179.4m

    BAS lodgment

     

     

    % lodged – monthly

    88.8

    90.3

    % lodged – quarterly

    84.3

    82.1

    % lodged on time – monthly

    80.6

    82.5

    % lodged on time – quarterly

    77.5

    74.7

    Note: For the purposes of this report, liabilities raised do not include general interest charges and shortfall interest charges.
    Table 3: Cost-effective administration

    Key outcome

    Measure

    31 Dec 2014

    31 Dec 2015

    Cost effectiveness

    Cost as a % of revenue

     

     

    International benchmark (2007) Average 1.22, range 0.82 to 1.53

    1.23

    1.20

    Operational and cost management

    Variation of GST administration costs

     

     

    from agreed estimate

    -2.7

    1.8

    (Variation from estimate– $m)

    (under estimate by 9.3m)

    (above estimate by 6.3m)

    Compliance costs as a % of total administration costs(4)

    44

    44

    (4) Compliance costs for the Department of Immigration and Border Protection (DIBP) are excluded from this calculation. The previously published result for 31 December 2014 has been amended to exclude DIBP costs.

     

    Table 4: Department of Immigration and Border Protection

    Key outcome

    Measure

    31 Dec 2014

    31 Dec 2015

    Management of GST revenue collection

    GST liability assessed(5)

    $14.25b

    $15.12b

    GST collected

    $1.81b

    $1.97b

    Maintain compliance

    Active compliance costs

    $15.0m

    $16.2m

    Compliance coverage – imports

    7.5%

    8.7%

    Compliance coverage – exports

    1.1%

    0.1%

    Audit coverage – tourist refund scheme

    100%

    100%

    Tourist refund scheme claims rejected

    3.9%

    3.7%

    GST adjustments – underpaid GST revenue

    $38.4m

    $20.3m

    GST adjustments – rejected tourist refund scheme claims

    $2.6m

    $2.2m

    Total GST adjustments

    $41.1m

    $22.4m

    Active compliance yield

    2.73:1

    1.38:1

    Cost-effective administration

    Costs of import processing

    $10.6m

    $11.6m

    Costs of export processing

    $0.2m

    $0.2m

    Costs of import and export compliance

    $8.3m

    $9.1m

    Costs of administering the tourist refund scheme

    $6.8m

    $7.1m

    Total costs

    $25.8m

    $28.0m

    Import declarations processed

    2.1m

    2.1m

    Export declarations processed

    712,724

    758,656

    Total tourist refund scheme claims processed

    357,588

    419,615

    Total costs as a % of total GST liability assessed

    0.2

    0.2

    Total costs as a % of total GST collected

    1.4

    1.4

    (5) The majority of GST liability assessed relates to GST on imported goods that have been deferred under the GST deferral scheme. Around 11,000 GST registrants have a ‘deferred GST registration’. The scheme allows approved businesses to defer the payment of GST on taxable importations to the owner’s next business activity statement (BAS). The BAS is to be lodged and paid to the ATO by the 21st day following the month in which the GST was deferred. GST collected by DIBP (i.e. GST paid by importers at the border (point of importation)) forms only a small proportion of the GST liability assessed. It should be noted that deferred GST registrants have a low level of debt to the ATO.
      Last modified: 01 Jun 2016QC 49223